GM’s Union Workers in Canada Vote to Ratify Agreement

By Ari Altstedter -
Sep 28, 2012

General Motors Co. (GM) employees
represented by the Canadian Auto Workers ratified a four-year
contract that follows a union agreement with Ford Motor Co. (F) that
reduces the cost of new workers while committing to some new
jobs and investment.

The vote was 73 percent in favor, the Toronto-based union
said yesterday in an e-mailed statement. The agreement covers
about 5,600 GM workers in Ontario, including those from a
vehicle-assembly operation in Oshawa that makes the Chevrolet
Impala and the Cadillac XTS, as well as from a plant in St.
Catharines that makes V-8 and V-6 engines.

Talks between the CAW and the three major U.S. automakers
began last month with the companies saying labor costs in Canada
are too high and the union facing job cuts.

Ford was the first company to reach an agreement on Sept.
17 that set a pattern exchanging most cost-of-living raises for
bonuses, extending the amount of time for a new employee to
reach full pay, and shifting new workers to a cheaper retirement
plan. Detroit-based GM reached a similar accord Sept. 20 and
Auburn Hills, Michigan-based Chrysler Group LLC did so this
week.

Under the new contract, GM workers will receive C$2,000
($2,039) lump-sum payments in the contract’s second, third and
fourth years in lieu of cost-of-living raises, as well as a
C$3,000 ratification bonus. The hourly rate for new hires will
fall to C$20.40 from C$23.80 and the time to reach a base salary
of C$34 will now be 10 years, instead of six.

Retirement Plan

The contract alters retirement plans for new hires, moving
half the pension into a defined-contribution plan where workers
pay a set amount into a pension fund while the eventual payment
depends on the fund’s performance. The rest will come from the
union’s defined-benefit plan, which guarantees a certain amount
at retirement, and obliges the company to make up the shortfall
if the pension fund underperforms.

The GM accord also calls for an Oshawa plant that had been
set to close in 2013 to remain open one more year and another
Oshawa factory to add a third shift of 900 workers. An engine
and transmission plant in St. Catharines, southwest of Toronto,
will get 100 new jobs.

The agreement will create, maintain or extend a total of
1,750 jobs and calls for GM to invest C$675 million in its
Canadian plants, the union said at a Sept. 20 news conference.

A ratification vote for CAW members at Chrysler is
scheduled for Sept. 29 and Sept. 30.